Alleged tobacco kingpin Kazem ‘Kaz’ Hamad has been arrested in Iraq – what happens next?

Overnight, government authorities in Iraq arrested Kazem “Kaz” Hamad, the alleged kingpin of Australia’s illicit tobacco trade.

Declared by an Iraqi court to be “one of the most dangerous wanted men in the world”, Hamad is the alleged mastermind behind the nation’s raging “tobacco wars”.

This violent and ongoing underworld turf war has featured more than 260 arson attacks, “countless” instances of extortion and intimidation, as well as multiple murders, including of an innocent bystander.

In the process, Hamad allegedly amassed a vast fortune estimated in the billions of dollars.

Hamad’s arrest will no doubt be welcome news to the federal government and the nation’s law enforcement agencies, which have struggled to contain the proliferation of illicit tobacco stores and the violence associated with the trade.

However, even if Hamad is extradited and convicted for his alleged crimes, we should be wary of the likely unintended consequences – the illicit tobacco trade will continue in Australia under new leadership, which could prove more dangerous than ever.

What happens next?

In the short term, Australia’s law enforcement agencies will be on high alert for any outbreak of violence between organised crime groups involved with illicit tobacco.

This is a frequent occurrence in illicit markets during periods of instability, such as after the death or imprisonment of a powerful leader.

Rival groups will perceive his arrest not as a deterrent but as an invitation to expand their reach and control over the nation’s highly lucrative illicit tobacco market. This was recently estimated to be worth up to A$7 billion or roughly 40% of the nation’s entire illicit drug economy.

History is littered with examples of what happens after the incapacitation of powerful organised crime figures.

A prime example was the death of infamous cocaine trafficker Pablo Escobar at the hands of Colombian police in 1993, which fatally weakened his Medellin Cartel.

However, rival cartels were quick to take advantage.

The biggest beneficiaries, the Cali Cartel, innovated sophisticated new trafficking methods that were harder for enforcement agencies to combat.

Under their leadership, cocaine production increased across Latin America in the years following Escobar’s death, as did seizures at the United States border.

In short, while prompting major changes to the internal order and operation of organised crime groups, Escobar’s death produced no long-term impact on either the production, trafficking, or consumption of cocaine, which globally continues at an all-time high.

What are the implications for Australia?

The reason Hamad’s arrest will likely have little impact on Australia’s illicit tobacco trade is the same as it was for Escobar – it does nothing to fundamentally alter the main drivers of the illicit trade.

These include persistent, widespread demand for nicotine – Australia’s third most popular recreational drug after caffeine and alcohol – and a lack of affordable, appealing options for consumers in the legal market.

Australia’s extraordinarily high levels of tobacco excise, intended to decrease tobacco consumption, have resulted in the world’s most expensive cigarettes.

A pack-a-day smoker wanting to consume legal tobacco is looking at a yearly bill of around $16,000.

As predicted, this extraordinary impost, coupled with the ban on consumer vapes – a less harmful tobacco substitute and effective quitting aid – has proved increasingly counterproductive.

It has pushed Australia’s millions of nicotine consumers into the willing hands of organised crime groups.

These groups sell illicit tobacco for a fraction of the legal price – reportedly for sale as cheaply as $8 a pack. The average legal packet of cigarettes is about $40-60.

Cheap illicit tobacco has now flooded the country, with early evidence suggesting it has led to Australia’s first increase in smoking prevalence since the 1990s.

These negative outcomes point to the limitations of relying too heavily on law enforcement and restrictive regulations to solve social problems that are largely beyond their capacity to control.

Australia’s illicit tobacco market remains large, profitable, and highly resistant to enforcement. No one should be under any illusion that Hamad’s arrest will make a significant difference.